Do you suppose Trudeau and Morneau were thinking of Southern Alberta when they put the new rules in for First-Time Home Buyer's?
Well, you don't need to be an Expert® to know that answer, I'm thinking.
Once again our friends in Ottawa concoct a plan to create the biggest possible illusion of action in the eyes of their voters in Toronto the Good. I would argue that it isn't the most effective tool to use in that market either, but it provides the great appearance of saving the hapless little Canadian (insert selfie here) from their own free-enterprising selves. Not really an excellent economy-growing idea there, chaps.
My satirical political comments aside now - what effect could this have here?
The new rules are in place for First Time home buyers with less than 20% down who will now have to demonstrate the ability to pay their mortgage should interest rates happen to rise significantly. Also, it is an attempt to decrease the government's obligation to pay the mortgages in case of a housing price crash - meaning the banks will have to be more responsible for the loans they give out. Low and behold, a reason to increase lending rates has been created.
It will certainly be substantially harder for these first time buyers to qualify for their mortgages. Many, unfortunately, will be relegated to the world of 'Forever Renting'. I want to encourage you potential first-timers to pursue your dream, though. Expect to lower your expectations for your first home, but starting your investment at a lower amount is key to building equity. Get solidly into your first home and upgrade as soon as your situation allows.
Talk to me about your hopes and plans and I will help find a great fit for you!
“When Quality Matters.”
It's what I love to do! (403)393-5582 / rlagemaat@sutton.com
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